Depleting inventories makes bullish case for Zinc

Zinc is currently the fourth most widely consumed metal in the world after iron, aluminum, and copper. Zinc is used primarily to galvanize steel which is the process of adding thin layer of zinc to steel to make it rust proof.

Talking about zinc’s supply and demand, an unlikely scenario that we have heard in todays world is supply deficit. It is a concept which is uncommon. It is indeed rare to see supply deficit in metals let alone showing signs of wider supply deficit in years to come.

Zinc had incredible year in 2016. It gained 63 per cent and in 2017 corrected 6 per cent.

Zinc is correcting in 2017 as in 2016 it had stellar performance and besides starting from 2017, all base metals were correcting as China once again was showing signs of slowdown and Trump’s infrastructure spending had no timeline and market has no clue when it would be incorporated. First let us look at the demand side. China is world’s leading consumer of Copper and Zinc. It is estimated that 42% of world’s zinc is consumed by China.